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Turf battle at mobile home park

When Sandy James retired from her job at Weyerhaeuser a year ago, she didnt expect skyrocketing rents at her home in the Kloshe Illahee retirement mobile home park to force her back into the workplace.

But rent hikes amounting to $165 per month Ñ nearly $2,000 each year Ñ during her two-year residency at the park have left James with no choice but to return to work full-time.

Retirement is no longer an option, James said.

With rent going up, Im not sure were going to be able to afford to stay here. If it goes up again this year, what is it going to go up to next year? she said.

There have been problems since Chicago-based Manufactured Homes Communities Inc. (MHC) acquired the mobile home park in 1997, residents claim. Not content with the amount of maintenance performed by the parks owners or the number of rent increases, tenants mobilized in 2001 and formed the Kloshe Illahee Residents Association with the intent of purchasing the property and running it themselves.

The residents, who own and maintain their manufactured homes on lots rented from MHC, have more interest in the property than the company that owns it, said association president Ken Newton.

To date, residents offers to purchase the park have fallen on deaf ears. MHC has refused to discuss the possibility with the residents.

MHC executives contend that the property has been properly maintained and the rent increases have merely made Kloshe Illahees discounted rents more in line with the areas current market value.

Our communities, like Kloshe, exist in a marketplace. We dont unilaterally set the cost of housing, said Ellen Kelleher, executive vice president and general counsel of MHC. To the extent market adjustments need to be made in rent, it is appropriate for us to do that.

Although rent at Kloshe Illahee is in the same ballpark as other local manufactured home parks Ñ and will nearly double some parks with the implementation of 2003s increase to $600 or $625 Ñ Kelleher said the company looks to the cost of apartments, condominiums and single-family homes when generating cost comparisons.

You have to look at the total cost of choosing to live in Federal Way, said Kelleher. Im confident that our market info is based on current information.

MHCs primary obligation, Kelleher said, is to the companys shareholders who receive 90 percent of the profits through dividends.

Many of our shareholders are just the kind of people at Kloshe Illahee ÐÐ retirees living on fixed incomes, said Kelleher. Our shareholders are our fiduciary obligation.

Kloshe Illahee residents say they have no problem paying annual cost-of-living rent increases, but protest what they term incomprehensible rent hikes.

Long-time resident Hal Eby has lived at the park for 19 years. This year alone, his rent will increase 17 percent over last year.

During the same period, Ebys Social Security benefits have increased 1.4 percent. Water, sewer and garbage rates Ñ the utilities Kloshe Illahee provides to residents Ñ have remained unchanged over last year.

With absolutely nothing happening to increase the management costs to MHC, Eby said he questions why the owners would choose to dramatically raise the rent Kloshe Illahees residents are paying.

Eby and many other residents believe the answer to the most recent rate hike is retribution for a lawsuit filed against the company by the residents association last year.

At the root of the lawsuit, filed in King County Superior Court, is a $75-per-month rent increase MHC implemented for new residents in January 2001. Although the policy was eventually put on hold, residents who moved into the park while it was in place have continued to pay the $75 higher rent each month.

Long-time residents allege that the rent increase caused home sales to plummet from an average of 15 or 20 per year to a mere six in 2001. Of the six that sold, the majority had to lower their prices by thousands of dollars to find a buyer, residents said.

When new buyers heard they were going to be paying $75 a month more than their neighbor, they didnt want to buy, said Newton.

MHC executives say they have seen no evidence that the $75 rent increase has adversely impacted Kloshe Illahee residents ability to sell their homes. A letter from the residents association informing the company of the impact of rent hikes on homeowners has not made it across her desk, Kelleher said.

If rents are appropriately priced, there would be a market for homes, said Kelleher.

Alleging that the rent hike for new tenants is against Washingtons Landlord Tenant Act, the residents association filed suit against MHC in December 2002. An annual $50 cost-of-living rent increase slated to take effect for all residents in 2003 was changed to a flat rent for all tenants soon after.

The new rent of $600, or $625 for a lot on the greenbelt, will increase rent by as much as $75 to $112 each month for residents.

My income hasnt gone up, I live on a fixed income. Who knows how much longer I will be able to stay here, said Joyce McNab, a 16-year resident of the park.

As rents continue to rise and home sales stagnate, some residents have been left with no choice but to abandon the homes they purchased. Others have looked into relocating to a new park, but there are few that have space for residents mobile homes.

After their experience at Kloshe Illahee, few residents are eager to move into a new park.

When I moved in here, I said this is my last move, said Newton. Whatever it takes, I am going to hold on.

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